TOKYO 3M Co (MMM.N) may spend about $2 billion on acquisitions in 2010, double its previous estimate, as the U.S. maker of Scotch Tape and Post-It notes looks to bolster its overseas operations, its top executive said on Monday.
"We told Wall Street that we would spend probably a billion dollars or north of that, but I suspect that it will be somewhat higher," CEO George Buckley told Reuters in an interview.
"It could be double that number by the time the year is out, depending on how successful we are in capturing targets," the 63 year-old executive added.
Buckley said health care, home and office products and security were among target areas for its acquisitions.
Considered an economic bellwether, 3M has enjoyed rising profits in the first half of this year as sales in Asia ramped up following the global recession and as U.S. consumers rebuilt inventories slashed last year to conserve cash.
But some investors are worried that 3M's profits could slowdown as government stimulus and inventory rebuilding end in the United States, European economies struggle and monetary tightening in China puts a damper on growth.
Last week, J. P. Morgan Securities cuts 3M to "underweight" from "neutral" citing macroeconomic risks, including a slowdown in the electronics market. 3M's major products include films used in flat TVs.
Buckley said 3M's earnings growth would remain robust in the third quarter, after the manufacturer reported an 18 percent increase in sales for the previous three months -- its third consecutive quarterly revenue growth.
Analysts on average are looking for earnings of $1.505 per share in the third quarter, and around $5.8 per share for the full year to end-Dec, the high end of 3M's estimated range, according to Thomson Reuters I/B/E/S.
Buckley said the company's focus on high-end products would help it weather any slowdown in electronics demand.
"We are making films for 3D televisions, for the high performing LED televisions, so I think that the market mix will favor us a little more favourably than it might some other parties," he said during a trip to Tokyo to celebrate the 50th anniversary of its Japanese unit's establishment.
Shares of 3M closed down 1.4 percent at $80.66 on the New York Stock Exchange on Friday.
(Reporting by James Topham; Editing by Joseph Radford and Nathan Layne)